Drägerwerk AG & Co. KGaA ETR: DRW3 reported higher sales, sharply improved earnings and a return to positive free cash flow in the first half of 2026, supported by demand across its safety business, improved gross margins and customs refunds recognized during the second quarter.
Chief Executive Officer Stefan Dräger said order intake reached about €1.75 billion, slightly exceeding the prior-year level, while net sales increased by more than €90 million to roughly €1.6 billion. EBIT more than tripled to around €64 million from approximately €20 million a year earlier, raising the EBIT margin to 4.0% from 1.3%.
“With continued good demand, excellent net sales development, and significantly higher profitability, we delivered a strong business performance in the first six months of 2026,” Dräger said.
Sales Growth Outpaced Order Intake
Group order intake rose 1.8% on a currency-adjusted basis during the first six months. Chief Financial Officer Gert-Hartwig Lescow said growth was recorded in all regions except the Americas, where comparisons were affected by a major Mexican hospital infrastructure order received in the second quarter of 2025.
Net sales increased 7.7% in the first half and 8.5% in the second quarter. Sales growth in EMEA, the Americas and Germany offset a decline in Asia-Pacific, Lescow said.
The group’s gross margin improved by 1.7 percentage points to 46.5%, with contributions from both business divisions. Functional expenses rose €24 million, or 4.8%, in the first half, primarily due to personnel costs in Germany and elsewhere in Europe. Freight and marketing costs also contributed to the increase.
In the second quarter, functional expenses rose 8%, reflecting similar cost pressures. Lescow said the company is monitoring headcount and expects full-year functional expense growth to remain below sales growth, although freight rates remain a headwind amid geopolitical tensions in the Middle East.
Medical Business Narrows Losses
The medical division’s first-half order intake declined 3.7% to about €956 million, largely because of the prior-year Mexico order. Excluding that effect, medical order volume would have been approximately stable, Lescow said.
Demand for anesthesia machines, ventilators and patient monitors declined, while demand increased for warming therapy devices, consumables, accessories and services. Order intake fell 11.5% in the second quarter, as the Mexico comparison had a more pronounced effect.
Medical sales nevertheless rose 7.6% to around €898 million in the first half and increased 9.7% in the second quarter. The Americas were the largest contributor to sales growth, followed by EMEA and Germany.
The division’s gross margin increased by 2.1 percentage points to 44.6%, aided by a favorable product mix despite adverse currency effects. Medical EBIT improved to a loss of €14.3 million in the first half from a loss of €33.7 million a year earlier, while the EBIT margin improved to negative 1.6% from negative 4.0%.
During the second quarter, medical EBIT returned to positive territory at €4.3 million, compared with a €5.9 million loss in the prior-year quarter.
During the question-and-answer session, Dräger said he expects the medical business to develop faster in growth and profitability in the near to medium term. He cited service-oriented device connectivity, assisted therapy and automation as areas that customers have received well, particularly as healthcare providers address personnel constraints.
Safety Division Delivers Strong Profit Growth
The safety division posted first-half order growth of 9.5%, driven by demand across product areas and regions. Respiratory and personal protection products, gas detection equipment, occupational health and safety products, and services all contributed, according to Lescow.
Second-quarter safety order intake rose 19.0%, with particularly strong development in the Americas and Asia-Pacific. First-half sales increased 7.8%, led by the Americas, EMEA and Germany, while Asia-Pacific sales declined. Second-quarter sales rose about 7%.
Safety EBIT increased to approximately €78 million in the first half from €54 million a year earlier, lifting the division’s EBIT margin to around 11% from roughly 8%. In the second quarter, EBIT rose to about €42 million from €26 million, and the margin improved to 11.3% from 7.6%.
Dräger told analysts that he considers the safety division’s sales and profitability momentum sustainable. While some markets, including the chemical industry, remain weak, he said defense activity is picking up and the broader markets served by the division are solid. He added that he does not view current safety margins as a peak followed by a decline.
Cash Flow, Customs Refunds and Outlook
Operating cash flow improved by about €43 million to around €60 million in the first half, reflecting higher earnings, lower income-tax payments and working-capital management. Free cash flow rose to approximately €16 million from negative €42 million in the prior-year period.
Net financial debt declined by around €79 million to about €190 million, while the ratio of net financial debt to EBITDA improved to 0.5. The company repaid a €50 million maturing loan note with its own liquidity at the start of the first quarter.
Results also benefited from half of €7.8 million in customs refunds recognized in cost of goods sold during the second quarter. Lescow said Drägerwerk received an additional €14.2 million of customs refunds, including interest, after the half-year balance-sheet date. That amount will be recognized in third-quarter earnings. The company said an additional €7 million to €9 million of refunds may be possible, though the timing and final amount remain uncertain.
Drägerwerk maintained its expectation for currency-adjusted sales growth of 2% to 6% in 2026. It raised its expected EBIT margin to between 6% and 8%, following the additional customs refunds. Dräger said the company remains focused on reaching an EBIT margin of 10% by 2030 through an annual improvement of roughly one percentage point.
The company plans to host a capital markets day for institutional investors and analysts on Nov. 18, 2026, at its headquarters in Lübeck.
About Drägerwerk AG & Co. KGaA (ETR:DRW3)
Drägerwerk AG & Co KGaA operates as a medical and safety technology company worldwide. It develops, produces, and markets system solutions, equipment, and services for acute point of care, including emergency medicine, perioperative care, intensive care, and perinatal medicine. The company also develops, produces, and markets products, system solutions, and services for personal protection, gas detection technology, and integrated hazard management to customers in industry and mining sectors, as well as public sectors, such as fire departments, police, and disaster protection.
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